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Applying the Fraud and Abuse Laws
in Digital Health
Session 250, February, 14th, 2019
Paul Westfall, American Medical Association
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Paul Westfall, J.D.
Has no real or apparent conflicts of interest to report.
Conflict of Interest
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• Learning Objectives
• Background
• Use of Digital Tools
• Better, Same, or Worse? Solutions?
• Examples
• Hype cycle technologies
PAY ATTENTION: I MAY OR MAY NOT HAVE
CANDY ON ME.
Agenda
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• Identify why fraud and abuse is so pervasive in health care,
common fraud schemes, and what tools can be used to
prevent fraud and abuse
• Recognize the importance of fraud and abuse in healthcare
and its impact on health information technology
• Display knowledge that the fraud and abuse laws can apply
to health information technology and that these laws carry
civil and criminal penalties
• Compare and contrast program integrity issues from the
traditional health care world to the digital health care world
Learning Objectives
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• Fraud = intentional deception to secure unfair or unlawful gain
– Services not rendered, kickbacks/bribes, unnecessary tests, upcoding,
unbundling
• Abuse/Waste = practice that’s inconsistent with standards that results in
unnecessary cost
– Insufficient documentation, medical necessity, incorrect coding, no
documentation
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The state of Healthcare
• Medicare Fee-for-Service: $40 billion in improper payments
(annual)
– Insufficient documentation: accounts for 2/3rds of
improper payments
• Physicians: $8.7 billion (annual)
• Federal Law Enforcement: $5.8 billion in funding (past 7
years)
– Recovered $25.8 billion in fraud (past 7 years)
• Just Medicare and just Fee-for-Service
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Fraud, waste, and abuse
• Why so much fraud, waste,
and abuse in health care?
– Nature of the business
– Lack of internal controls
– Lack of education
• Targets
– Aging populations and
high cost patients (chronic
diseases: Alzheimer’s,
dementia, diabetes)
– High volume and high
concentration (nursing
homes, home health)
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The Laws and Penalties
Law
Translation
False Claims Act
Don’t lie
to the
government
Civil Monetary
Penalties
Seriously, don’t lie (and
more)
Stark/Anti
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Kickback
Don’t get stuff
in return
for referring patients
Exclusions
Death knell to your
career in health care
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What does every healthcare fraud scheme need in order to be
successful?
A. Disgruntled employees
B. A patient and a provider identify
C. Threats of physical violence
D. Capability to launder money
POP QUIZ
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What does every healthcare fraud scheme need in order to be
successful?
A. Disgruntled employees
B. A patient and a provider identify
C. Threats of physical violence
D. Capability to launder money
POP QUIZ
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Keys to Preventing
Fraud and Abuse
• Your Conduct
• Your Employees/Contractors
• Your Compliance Program
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• Is it stuff?
• Are you using a digital health technology to
increase value and to better coordinate care for a
Medicare beneficiary?
– AKS/Stark violation FCA liability
– Don’t forget about your state!
• Enhance current schemes?
Use of Digital Health Technologies
make you vulnerable?
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• Perception of digital being worse?
– Easier to commit fraud?
– Less oversight from traditional oversight entities?
– New players unaware
• What does this perception mean?
– More oversight
– More prescriptive requirements up front
– Less desire to reimburse from health plans
• Or is it better? Same? Making excuses?
Traditional v. Digital
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Better
• Increase data accuracy
– Less human error
– Easier to show fraud (e.g., upcoding)
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Better
• Data: IP Address, geo-location, device identity
• Automatically creates background transactions
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Same
• Lying
• Cheating
• Stealing
• Not invasive
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Same
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Worse
• Costs less to look legit
How do we know that the
individual who is
examining Elroy’s throat
is a healthcare provider?
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Worse?
• Easier for unlicensed individuals to provide
care
• Enforceability of laws and regulations
across state lines and country borders
• More accurate data means more potential
scrutiny from the government
– Codes that use time as a proxy for
intensity
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• Affiliation with traditional medicine
• Established patients (e.g., virtual check-in)
• Controls in place for checking licensure or
exclusion and duplicate payments across
payment systems
• Interstate Medical Licensure Compact
Potential solutions?
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Imaginary?
• Perceived increase in utilization in using digital
medicine?
– Need to educate that digital health may increase
access
• More mobile, easier to steal?
– “Mobile devices in the health care sector remain
particularly vulnerable to theft and loss”
• Roger Severino, Office of Civil Rights Director, April 24, 2017
– Need to educate
• Mobile may not mean digital medicine. It could be just a
laptop from a hospital.
• Fallacy of physical security
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Home Health Example
• No actual home health therapy is provided. The patient is asked
to sign forms that verify a nurse or staff showed up at her home
and provided services.
• To justify charging for a nurse or staff, a fraudulent physician who
is not the beneficiary’s primary doctor may falsely certify that the
beneficiary is an insulin-dependent diabetic and cannot inject
himself.
• Unscrupulous physicians may also falsely certify that a beneficiary
is home bound. In exchange, the beneficiary will be offered cash
on a monthly basis or provided a home health aide that only
prepares meals or cleans.
• Better, same, or worse?
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Better
• Data accuracy
– Digital medicine provides data of glucose levels without
human error or manipulation
– Measure glucose levels to determine if insulin dependent
• Automatic data processing
– Compare claims data to see if there is any data being
exchanged between computers
– Help determine whether services are actually performed
• IP Address
– May help determine if patient is homebound
Audience Feedback
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Same
• Lying, Cheating, Stealing
– As it was in the traditional, and now, and ever shall be in the
digital....
• From the example
– False certifications
– Kickbacks
Audience Feedback
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Audience Feedback
Worse
• Cost less to look legit
• Easier for unlicensed individuals to provide care
• Enforceability of laws and regulations across
state lines and country borders
• Factors figuring into whether digital medicine is
potentially worse will probably be cross applicable
regardless of service type
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Blockchain
• Immutable,
distributed ledger
• Patients can control
data
• Well, hello
beneficiary
inducement CMP!
Artificial Intelligence
• Nefarious and
unintended
• Fraud detection
• Type of remuneration?
• New frontier with a lot of
unknowns
• How do you regulate
something that's
constantly changing?
Blockchain and AI
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• Identify why fraud and abuse is so pervasive in health care,
common fraud schemes, and what tools can be used to
prevent fraud and abuse
• Recognize the importance of fraud and abuse in healthcare
and its impact on health information technology
• Display knowledge that the fraud and abuse laws can apply
to health information technology and that these laws carry
civil and criminal penalties
• Compare and contrast program integrity issues from the
traditional health care world to the digital health care world
Revisiting the Learning Objectives
